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The quest to be “greener” is costing many companies money. But this doesn’t necessarily mean that the effort should end. There are many ways to finance environmental initiatives, and they range from a small investment of time to significant capital outlays.

Consider Your Investment Options

There are two types of sustainable investments that organizations should consider when promoting sustainability: green bonds and social impact investments.

Green Bonds

Green bonds are designed to finance environmentally friendly projects. They can be used to build wind farms or solar panels, upgrade wastewater treatment plants, or conserve endangered species.

Green bonds are attractive for small businesses looking to make an investment that is also good for society. Many of them offer to finance at rates comparable to other forms of debt such as bonds and loans.

Many tax incentives are available when issuing green bonds, including a fairly broad exemption from federal income taxes. The proceeds can be used for a wide array of environmentally friendly initiatives and they typically provide an attractive financial return. Be sure to check with the IRS if you’re considering using green bonds to finance your sustainability strategy.

Social Impact Investments

Social impact investments (SII) are designed to benefit society and the environment. One example is a loan to help launch a socially responsible business, such as a fair-trade coffee shop or an organic convenience store chain.

Under the Federal Bonding Program, employers can get a free fidelity bond through enhanced security such as identity theft monitoring. The Fidelity Bonding pilot program is targeted at companies with at least one employee who can attest that they are in good standing and not be at risk of committing fraud.

Another option for small businesses or startups is hiring a financial professional specializing in SII, such as a social impact investor (SII), angel investor, or impact investment advisor. If you decide to invest in this way, be sure that your investments go towards socially responsible projects and are financially viable.